Locke Lord QuickStudy: FAA Admits Unmanned Aircraft Systems, i.e. Drones, are a Severely Underfunded Mandate

March 17, 2017

The use of Unmanned Aircraft Systems (“UAS” or “drones”) in commercial settings has proliferated since the Federal Aviation Administration’s (“FAA”) long-awaited regulations governing the commercial use of drones, 14 CFR Part 107, came into effect in August 2016. Indeed, the FAA reported that from August 31, 2016 to December 9, 2016, over 28,000 people applied to obtain the remote pilot in command certificate, which is necessary to operate drones for commercial purposes, while nearly 23,000 certificates were issued. Industries with particular interest in drone usage have included energy, construction, real estate, media and agriculture.

Those who are using or seeking to use drones in their businesses have come to quickly realize, however, that the operations currently permitted by the FAA under Part 107 are limited, and that the FAA has a great deal of work ahead to fully integrate drones into the National Airspace System (“NAS”). Among the many critical items that need to be addressed are permitting operations beyond visual line of sight, over people and involving package delivery, as well as airspace management and hazard mitigation. 

Last week the FAA publicly declared what has been evident to many observers – it lacks the resources necessary to keep up with the demand for UAS services and to take the steps necessary to fully integrate drones into the NAS. The FAA’s confession came via the announcement of its Drone Advisory Committee (“DAC”) Task Group 3 – Tasking on Unmanned Aircraft Systems Funding. The DAC, a long-term advisory board made up of CEO/COO-level executives from a cross-section of stakeholders representing a wide variety of UAS interests, has been asked “to evaluate and analyze potential mechanisms for UAS users to fund the activities and services required to safely integrate UAS operations into the NAS over the near term.” The DAC Task Group’s interim recommendation report is due no later than June 30, 2017, with a final report to be issued by March 2018.

The FAA’s announcement is striking in its frank admission of the inability to keep up with current demand and the negative impact on future integration efforts that can be expected if additional funding is not found. Indeed, the FAA acknowledged that just one month after implementing Part 107, the “demand for UAS operations had already overwhelmed our traditional systems and manual processes.” In particular, the FAA noted that the current backlog of requests for Certificates of Waiver or Authorization to conduct operations beyond those permitted by Part 107 is even worse than the delays experienced with the exemption process under Section 333 of the FAA Modernization and Reform Act of 2012, which Part 107 was intended to supplant. The FAA warns that the situation will only grow “more urgent” as it attempts to tackle the many important tasks ahead, including rulemaking for operations over people and beyond visual line of sight. As the FAA candidly admits, if additional funding cannot be found “the FAA will not be able to keep pace with the dramatic growth in public, industry, and business demands for UAS operations” and “progress will be greatly impacted.”

What Does this Mean for You?
While Part 107 was an important initial step, it was only that, a first step. Much work remains before the economic benefits arising from the commercial use of drones can be fully realized. Unfortunately, the FAA’s announcement, particularly when coupled with the current Administration’s two-out-one-in stance on regulations, makes clear that industry should not expect these steps to be completed any time soon. In the interim, operators will be required to either confine their operations to those permitted under Part 107 or go through the Certificate of Waiver or Authorization process, which can involve lengthy delays. Of course, this likewise begs the question of enforcement and whether the FAA’s inability to act will prompt a reoccurrence of rogue operators that Part 107 and the FAA’s drone registry appeared to have mitigated. The FAA’s announcement certainly suggests that going forward industry will be called on to shoulder some portion of the cost of the FAA’s UAS integration efforts through additional fees, taxes, or otherwise.

To the extent you have questions regarding the current regulatory environment governing the commercial use of UAS and how they may impact your business, the Locke Lord Aviation and Defense Group is ready to assist.